Online food ordering
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Online food ordering is a process of ordering food from a local restaurant or food cooperative through a web page or app. Much like ordering consumer goods online, many of these allow customers to keep accounts with them in order to make frequent ordering convenient. A customer will search for a favorite restaurant, usually filtered via type of cuisine and choose from available items, and choose delivery or pick-up. Payment can be amongst others either by credit card or cash, with the restaurant returning a percentage to the online food company.
In May 2015, TechCrunch reported that "of the $70 billion [takeout and delivery market], only about $9 billion (roughly 13 percent) is online."
The preexisting delivery infrastructure of these franchises was well suited for an online ordering system, so much so that, in 2008, Papa John's International announced that its online sales were growing on average more than 50 percent each year and neared $400 million in 2007 alone.
Local companies have teamed up with e-commerce companies to make ordering quicker and more precise. Annie Maver, director of operations for The Original Pizza Pan, Inc. of Cleveland, Ohio comments that "the system is good for customers who don't speak English."
Some restaurants have adopted online ordering despite their lack of delivery systems, using it to manage pick-up orders or to take reservations.
Independent online food ordering companies offer two solutions. One is a software service whereby restaurants purchase database and account management software from the company and manage the online ordering themselves. The other solution is an Web-based service whereby restaurants sign contracts with an online food ordering website that may handle orders from many restaurants in a regional or national area.
One difference between the systems is how the online menu is created and later updated. Managed services do this via phone or email, while unmanaged services require the customer to do it. Some websites use wizards to find the best-suited menu for the customer.
Food cooperatives also allow consumers the ability to place an order of locally grown and/or produced food online. Consumers place an order online based on what is available for the ordering cycle (month, week) and then pick up and pay for their orders at a central location.
Many restaurants offer the technology to place an order with an app, and may offer a discount or bonus item when the order is placed.
Advantages for online ordering
Disadvantage for online ordering
Customers are not able to ask about quality of food or ask for any specialized diet foods. It is more difficult to ask for gluten free or allergy free foods with online ordering. Also, it is more possible for a customer to place an order but never pick up the order which can lead to waste of food and possibly a loss of profits.
Timeline of online food delivery
|Time period||Key developments in online food delivery|
|1996–2001||This era is characterized by the rise of the Internet, the dotcom boom and the subsequent crash. Dotcom startups like Webvan, HomeGrocer, and Kozmo started online grocery delivery, but ended up closing in 2001 after the dotcom crash. Seamless is also founded.|
|2001–2010||GrubHub is founded. By the late 2000s, major pizza chains have created their own mobile applications and started doing 20-30% of their business online.|
|2011–2015||With increased smartphone penetration, and the growth of both Uber and the sharing economy, food delivery startups start to receive more attention again. This era is associated with the founding of Caviar and Instacart. By 2015, online ordering is about to overtake phone ordering.|
|Year||Month and date (if available)||Event type||Details|
|1989||Foundings||Peapod, which pioneers the online grocery delivery concept, is foundedby Andrew and Thomas Parkinson in Evanston, IL.|
|1994||January||New Entrants||“PizzaNet” – Pizza Hut’s digital ordering hub, launches, and accepts the first-ever online order, a large pepperoni, mushroom and extra cheese pizza.|
|1996||July||Foundings||Webvan, an online grocery delivery service, is founded by Louis Borders. It IPOs on November 5, 1999.|
|1998||March||Foundings||Kozmo, an online delivery services for many services (including groceries) founded.|
|1999||December 1||Foundings||SeamlessWeb is founded in order to provide companies with a web-based system for ordering food from restaurants and caterers.|
|2000||June 26||Mergers and Acquisitions||Webvan buys out HomeGrocer.|
|2001||April 12||Closings||Kozmo shuts down. The company had made profits in New York, Boston and San Francisco in December and secured $25 million in investments prior to shutdown.|
|2001||July||Closings||Webvan shuts down.|
|2001||New Entrants||Papa John's pizza launches online ordering.|
|2002||March||New Entrants||Safeway begins delivering online grocery orders.|
|2004||Foundings||GrubHub, an online restaurant delivery service, is founded in 2004 by two web developers, Matt Maloney and Mike Evans, who were looking for an alternative to paper menus.|
|2007||August||New Entrants||AmazonFresh initially offers home grocery delivery to residents of the Seattle suburb of Mercer Island in an invitation-only beta test in August 2007.|
|2008||March 1||Foundings||Eat24hours, an online restaurant delivery service, is founded.|
|2009||January||Foundings||ZeroCater, a startup for delivering catered food to businesses, is founded.|
|2009||July||New Entrants||Pizza Hut launches a free iPhone application today that offers mobile ordering and games to play while one waits for delivery.|
|2012||February||Foundings||DoorDash, which would later become a Y-Combinator summer 2013 food delivery company, issues its first delivery.|
|2012||July 1||Foundings||Instacart, which offers an app that lets users order groceries and delivers them, is founded.|
|2012||September 12||Foundings||Caviar launches, and starts off offering delivery in the San Francisco area from high-end restaurants rated 4-stars or higher on Yelp.|
|2013||April||Foundings||Sprig, a delivery service for healthy meals, launches in San Francisco.|
|2013||June||Foundings||SpoonRocket, a Y-Combinator-backed company for delivering fast food meals, is founded.|
|2013||June||Companies||AmazonFresh expands out to Los Angeles. It would later expand out to San Francisco by December 2013.|
|2013||August||Mergers and Acquisitions||Seamless and GrubHub merge.|
|2014||August 4||Mergers and Acquisitions||Square acquires Caviar.|
|2015||February 10||Mergers and Acquisitions||Yelp acquires Eat24.|
|2015||February 18||New Entrants||Uber launches into the food delivery space with UberEATS, starting off in Barcelona.|
|2015||April 16||Indian Market||Online food ordering business in India witnessing exponential growth. Organized food business reaches worth US$ 48 billion, of which food delivery is US$ 15 billion. Several startups rose in 2015 including Zomato, TinyOwl, Swiggy, Innerchef, Food Panda and Fresh Menu with focus on apps.|
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